Ex Parte Interim Orders: Ex Parte Relief

26th May, 2020 - 5:17 am Categories: Legal Issues 0 Comments

Justice delayed is justice denied. One need not be lawyer to understand the gravity of the legal maxim as this is Magna Carta of the Constitution of India. The problem of delay becomes graver when justice is to be imparted in a situation where a litigation is progressing after an ex parte injunction order, which is an exception to a basic legal principle ‘audi alteram partem’ which insists that ‘the other side should be heard’ or ‘Opportunity of being heard must be given to all’.

This post highlights the roadblocks faced by a Defendant in his attempt to get an ex parte injunction vacated, judgments wherein the Hon’ble court has itself addressed the issue of difficulty in vacation of ex parte interim injunctions and how delaying tactics used by the aggrieved parties work as a tool against the defendants and paralyze them, eventually leading them to give in to inequitable negotiations. Order XXXIX Rule 3A, CPC states that once an ex-parte injunction is granted by authority then in such scenario, trial court must endeavour to expeditiously dispose of the injunction application and the period for the same as provided by the statute is 30 days. 

As observed in case of n Microsoft Corporation v. Dhiren Gopal and Ors., [2010 (42) PTC 1 (Del)], the judge himself was of the opinion that once an ex-parte injunction is granted by the Court after that an ex-parte injunction vacated or a decision on the application on merits by the court becomes a Herculean task for the other party. It has become a routine process. Under Order 39 Rules 1 and 2 CPC, deciding applications on merits after hearing the parties in such cases is a rare phenomenon. Except this, excuses are used to seek adjournments once a party gets ex parte injunction.

Intellectual Property law cases are especially plagued by the problem. Being property rights, the Plaintiffs deem it necessary for raids to be carried out to seize the allegedly infringing subject matter, and hence, demand an ex parte order to enable a raid without a notice to the other party. What follows is a long battle to get an order of injunction vacated which turns out to be nothing less than a life sentence for the defendant party since the business suffers heavily due to the order. To provide for some relief to the contrary, it was observed in the case of Vinayakrao S. Desai vs Interlink Petroleum Ltd. And Ors., that under Article 226(3) of the Constitution of India defendants can file an application at any time for vacating interim orders, this can be done in a scenario of absence too. In short there is no bar or time-limit for vacating interim orders but it observed that the object of granting the injunction would be defeated by the delay. To overcome this situation a step must be taken wherein before granting an injunction, direct notice of the application shall be given to the opposite party.

The recent month long lockdown in India due to the Covid-19 virus is a manifestation of how serious the repercussions of inactivity can be on a small business. Liquidity seizes after a month, employees are unable to receive payment and hence, most of them have to be laid off. Such is the case in Kent Ro Systems Ltd. & Anr. Vs. Rajat Bansal & Anr., a case wherein the vacation of injunction application has been unheard for what has turned out to be more than a year. In compliance of the same, what is the effect? The Plaintiffs have almost received the relief which they were looking for, without the Defendants having given even a chance to be heard. The Defendants are forced to pump in more money in generating alternate revenues streams when their most basic one lies paralyzed with no way of revival in sight. The vacation of injunction application (under Order 39 (4)) which is supposed to give the Defendant a chance to be heard, merits delayed for various reasons without taking note of how urgent the application is for the mere survival of the company. The excuses range from not enough time to hear the matter when it comes up, instances wherein the hearing isn’t “possible” on a given day, instances wherein the matter goes unheard because the judge happens to be on leave or simply because the Plaintiff hasn’t produced the right product in court.

Except for the one above, there have been numerous cases wherein ex parte interim orders have been granted for unlimited or indefinite periods without restricting it to a time-limit, which proves to be a serious threat for all Defendants. For example in the case of Gurdev Singh J. in Hari Singh v. Mst. Dhanno [ (1962) 34 Pun LR 5] the court observed the period of three months to-have an ex parte order to get aside. This period of three months is to be reckoned from the date of the order and not from any other date moreover no importance given to Defendant regarding obtaining knowledge of the order, its immaterial whether he has knowledge for the same or not. This view was reiterated by the learned Judge in Smt. Parson Kaur v. Bakhshish Singh [(1970) AIR 1971 Punj 88]. In no scenarios is justice as denied to Defendants brought into question. The Legislature here did not intend to give indefinite periods of time for setting aside such an order. It’s purely based on circumstances of the case and hence, the time limit to be given in each case.

Supreme Court in Ramrameshwari Devi & Ors vs Nirmala Devi & Ors advised to limit the life of the ex parte order to seven days instead of thirty, to nullify the possibility that plaintiffs can benefit from the continuation of ex parte orders beyond their sell-by date, however, the same hasn’t been followed or even referenced in most ex parte injunction cases.

Enforcement of the Rameshwari case is needed in the present scenario for justice to be done. While granting an ex parte injunction, balance of convenience and irreparable loss are essentials, which is observed in the case of Stanley Mutual Fund v. Kartik Das [(1994) (4) SCC 255]. As observed by Supreme Court, in Sakiri Vasu Vs. State of U.P.,[(2008) 2 SCC 409] , that powe given to an authority always includes incidental as well as implied powers so that it would lead to justice for all. Every power and every control, the denial of which would render the grant itself ineffective. In other words court has power in view of Ex-parte injunction and relief which must not be used against Defendants.

Sometimes ex-parte injunction/ order are essential to protect rights/goods and services. In case of >Munish Kumar Singla Trading As Chakshu Food Products Versus Jollibee Foods Corporation [LNIND 2017 DEL 4717], it was observed that in Intellectual Property Rights (IPR) matters ex-parte injunction is needed to protect rights of parties. Otherwise relief prayed for in the suit would become pointless. This will lead to the impugned goods being effectively counterfeit goods.

The Supreme Court in case of Venkatasubbiah Naidu vs. S. Chellappan and Others [(2000) 7 SCC 695], observed that after grant of an ex-parte injunction it must be disposed off within 30 days, otherwise it will be recorded in the Annual Confidential Reports of the concerned officer. This would be very difficult because every court has thousands of matters.  In case of Milmet Oftho Industries and Others vs. Allergan Inc [(2004) 12 SCC 624], it was observed that a reasonable period notice should have been issued to the parties when the ex-parte injunction order  had been passed. Otherwise it can lead to a havoc.

The enforceability and validity of ex-parte decree is similar to bi-parte decree. Thirty days is the limitation period for filing an application for setting aside an ex-parte decree and where it is unable to do so, a reason must be given for inability. In case of Guwahati University vs Niharalal Bhattarcharjee [(1995) SCC (6) 731], it was observed that due to lack of sufficient time for appearance of the suit it was adjourned. Time is the essence of ex-parte order in such scenario knowledge of the day of hearing as well reasonable time to appear before the court is important.

The apex court is observe in case of Morgan Stanley Mutual Funds vs Kartick Das [(1994) 4 SCC 225], that even the ex- parte injunction granted by court should be for a limited period of time but some decisions of subordinate courts show that the decision of the apex court is not followed by them and an ex- parte order granted without any precondition of time for hearing is given. Interim orders have not just a binding force but it must be followed throughout the India for justice. It is observed that ex- parte injuction should be made for exceptional cases only with an absolute timeline for vacation hearings so as to not cause the Defendants any kind of prejudice.

Author:  Niharika Sanadhya, Litigation Associate and Rachi Gupta, Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at paras@khuranaandkhurana.com.